The first rule of saving money, financial experts will agree, is not to leave it on the table. But substantial numbers of working-class readers in every business reporter’s beat are doing exactly that in one—or both—of the following ways:
- In 2019, only 2.4 percent, or 2.5 million of 104 million low- and moderate-income taxpayers, took advantage of the Free File Program from the Internal Revenue Service (IRS), according to a 2019 audit by the Treasury Inspector General for Tax Administration (TIGTA).
- Only one in every five low-income working families filed for the Earned Income Tax Credit (EITC), according to a survey from the tax preparation company Jackson Hewitt.
Business reporters can step into the gap and do what they do best: Give readers clear and accurate information so that they can save money during this tax season by asking them these two questions:
Do You Know You Can File Your Taxes for Free?
Assemble a panel of low- and moderate-income readers. Include a Certified Public Accountant (CPA) who holds the Personal Finance designation and a representative from one of your state’s departments whose job it is to ensure that qualified residents receive all the benefits they’re due. Call the IRS and ask what they’re doing to increase participation in Free File this tax season.
TIGTA’s audit says that the IRS hasn’t done enough to promote the Free File Program from the IRS, which has been available since 2003. Ten tax software companies offer free help to taxpayers based on their income, but many taxpayers don’t realize they need to access Free File through the IRS site, says TIGTA.
Ask your readers about their experience with Free File. How does their experience compare with what TIGTA found? Did they try, and fail, with Free File? Or did they know about this free resource, and not use it? Have the CPA on your panel walk each participant through the Free File offers available and choose the one that applies to them.
Do You Know If You Qualified for the Earned Income Tax Credit?
The EITC program was designed to help low-income workers, currently those earnings less than $40,000. Yet approximately 44 percent of these workers weren’t aware of the credit, and 37 percent said they didn’t know if they qualified, according to Jackson Hewitt. The credit ranges from $529 to $6,557, depending on the number of children in the household. This program, created in 1975, has not been fully utilized by those it was intended to serve.
Report this story as an online video, too. Walk readers through the Internal Revenue Service (IRS)/s digital tool on calculating the EITC, or create your own.
